Yip’s Chemical 2025 Net Profit Jumps 41.8% to HK$137 Million on Margin Expansion and Cost Controls

Bulletin Express03-26 22:03

Yip’s Chemical (00408) reported a 41.8% year-on-year rise in profit attributable to owners, reaching HK$137.41 million for the year ended 31 December 2025, despite softer top-line performance amid a challenging macroeconomic backdrop.

Revenue slipped 5.3% to HK$2.99 billion as sales volume declined 9.3% to 240,000 metric tonnes. Nevertheless, group gross profit margin improved 1.9 percentage points to 25.4%, supported by a sharper focus on niche segments, an optimized product mix and benign raw-material costs. Earnings per share advanced 43.0% to HK24.6 cents.

Business-line performance diverged. • Coatings: Revenue fell 5.3% to HK$1.38 billion while volume contracted 14.7% to 157,000 tonnes, yet gross margin climbed 3.6 points to 29.8%, propelling segment profit to HK$52.20 million (up 623%). • Inks: Revenue eased 3.3% to HK$1.32 billion; gross margin edged up 1.1 points to 21.6%. Segment profit declined 40.1% to HK$46.30 million owing to higher bad-debt provisions. • Lubricants: Revenue dropped 12.4% to HK$284 million with gross margin down 1.2 points to 22.1%; segment profit decreased 31.6% to HK$6.50 million.

The group’s 24%-owned solvents associate, Handsome Chemical, lifted export volumes to a record 1.80 million tonnes, but profit contribution retreated to HK$79.40 million (2024: HK$96.00 million) due to industry-wide margin compression.

Balance-sheet metrics remained conservative. Net bank borrowings fell to HK$539.94 million, trimming the gearing ratio by 3.3 percentage points to 13.4%. Operating cash inflow rose to HK$105.80 million (2024: HK$86.55 million).

Yip’s Chemical broadened its portfolio by acquiring a 60% stake in Beijing Sino-Hypro Petrochemical Tech, securing entry into China’s chemical vapour recovery and treatment market. In addition, Handsome Chemical commissioned a 600,000-tonne-per-year acetic acid and acetate facility in Hubei, enhancing vertical integration and scale.

Reflecting improved earnings, the board proposes a final dividend of HK12 cents per share, lifting full-year dividends 14.3% to HK16 cents. The payout awaits shareholder approval at the 4 June 2026 AGM, with payment slated for 22 July 2026.

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